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The use of context-sensitive insurance telematics data in auto insurance rate making

Yu-Luen Ma, Xiaoyu Zhu, Xianbiao Hu and Yi-Chang Chiu

Transportation Research Part A: Policy and Practice, 2018, vol. 113, issue C, 243-258

Abstract: Historically, auto insurers use various socio-demographic underwriting factors to differentiate driver risks. With the invention of GPS devices, information such as mileage, traffic condition and driving habits can be incorporated into auto insurance premium calculation. Several major auto insurance companies have offered usage based insurance (UBI) programs where auto insurance premiums are sensitive to actual GPS readings combined with driver’s driving behavior. However, given that telematics data are proprietary to the insurance companies that collect such data, the accessibility of UBI is extremely limited.

Keywords: Insurance rate making; Usage based insurance; Insurance telematics; Smartphone data; Context-sensitive data (search for similar items in EconPapers)
Date: 2018
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